IBM is India's second largest pvt sector employer

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19 August 2010  

BANGALORE: Tata Consultancy Services is the largest private sector employer in the country. It had 1,63,700 employees as on June 30. But guess who's number 2?

The honour goes to -- surprise, surprise -- IBM. That's right. Not to any Tata or Ambani company, or to Infosys or Wipro.

The fact that IBM has over one lakh people on its rolls in this country is one of India Inc's best-kept secrets. No one in US-headquartered IBM will admit that it employs such a large number of people in India -- for fear of a backlash at home. There's been rising anger in the US over the transfer of `American jobs' to lower cost havens, particularly India. Faced with an economic slowdown and a politically-damaging high employement rate, Barack Obama himself has begun to sound jingoistic. He has issued barely-veiled threats against US companies that ship out work and promised candies to those who stay patriotic.

Even as an IBM spokesperson declined comment when contacted, a source within the company said that in a couple of years, the India employee strength could cross that in the US, where it employs about 1,55,000 people, and where the pace of hiring is substantially slower than in India. IBM globally has a little over 4,00,000 employees. So, close to 1 in 3 of its employees is already an Indian.

Its staff strength is more than four times that of India's biggest private sector company, Reliance Industries, which employs about 23,000 people. It is bigger than
the combined employee base of the two Tata Group's crown jewels, Tata Steel (81,000) and Tata Motors (24,000).

A cross-section of industry analysts and manpower recruitment firms TOI spoke with not only put IBM's India workforce (including that of its wholly-owned subsidiary IBM Daksh) at over one lakh, some even went to the extent of saying it might be 1.3 lakh -- well over Infosys' 1.14 lakh as on June 30. Infosys is India's second largest IT firm by revenue and third, it now transpires, by employees.

Since 2007, the company has stopped disclosing the geographic break-up of its employee numbers. The last time it provided figures was in 2007, when it said it had 73,000 employees in India. Since then, the company has maintained that it's a global company and geographic numbers do not have any meaning in that context.

IT services firms have emerged as India's biggest job generators, even as traditional manufacturing firms -- historically big employers -- have tended to cut down on numbers to control costs. Typically, this sector also generates high paying, high disposable income jobs, unlike manufacturing.

It's well known that IBM has been hiring aggressively in India. The 2007 figure of 73,000 was a near 40% increase over the 2006 figure of 53,000. Since then, big IT companies have been hiring upwards of 20,000 people a year.

"Even during the recession years of 2008/2009, it was mostly IBM, along with Accenture, that kept the lights on in the hiring market," says a headhunter. In an environment where the pressure to cut/control cost is brutal, hiring people at relatively higher salaries has become a luxury few can afford.